U.S. ag secretary pours oil on troubled trade waters

Sonny Perdue, the U.S. secretary of agriculture, met with officials and reporters during a recent visit to Canada to explain the administration’s position for the pending NAFTA negotiations. | Ed White photo

It’s doubtful that U.S. President Donald Trump was thinking of Theodore Roosevelt’s foreign-policy advice — speak softly and carry a big stick — with his approach to NAFTA and agriculture in particular, but the United States is nonetheless following that counsel — sort of.

Trump bludgeoned and blustered his way through criticism of the North American Free Tree Trade Agreement and Canada’s dairy policies, but the man he has put in charge of agriculture speaks graciously and reasonably.

Sonny Perdue, the U.S. secretary of agriculture, met with officials and reporters during a recent visit to Canada to explain the administration’s position for the pending NAFTA negotiations.

ADVERTISEMENT

The issue, of course, is whether the administration is all of the same mind and whose voice will win out.

Canada most likely won’t agree with everything Perdue contends, but the issues are fairly typical of a trade agreement that is now almost 25 years old.

Perdue raised issues in the dairy sector, wheat grading and access to more space for U.S. wine on Canadian shelves.

But perhaps his most telling position is that of country-of-origin labelling, which isn’t part of NAFTA.

COOL — as it’s known — requires stores to label the origin of beef and pork. That is anathema to Canadian producers and American meat packers and processors. The World Trade Organization ruled that the former legislation, rescinded at the end of 2015, cost Canadian cattle and hog farmers upward of $1 billion a year.

“In my opinion, COOL is a settled issue,” he recently told The Western Producer’s Ed White.

ADVERTISEMENT

His biggest concern seems to be in the dairy sector, which effectively reduced U.S. farmers’ access to a $100-million market for milk protein products. Canada sees the issue as simply closing a loophole in the supply managed dairy sector, while the U.S. sees the issue as an unfair and sudden change in export rules for a milk product that wasn’t around when NAFTA was negotiated.

Perdue focused on a Canadian plan under consideration to market milk protein products internationally at world market prices.

“If (Canadians) want to have supply management regarding dairy prices, we know that if you go to New York to buy half a gallon of milk, it’s about half what it is in Canada,” he said. “As long as (Canadian) consumers are OK … then that’s OK with us, but you can’t use those kinds of supply management schemes to overproduce and create a glut in the world market.”

It’s a brewing dispute.

ADVERTISEMENT

Regarding wheat, grading is an issue that Canada has been prepared to address in the past. U.S. wheat brought into Canada that is not under contract is automatically downgraded to feed grade. It’s likely not going to be a major issue. Shipping grain to Canada in large amounts isn’t attractive because of our congested transportation system, and the amounts involved won’t be substantial.

As for wine, in some provinces, especially the key Ontario market, Canadian wines are featured more prominently than U.S. wines in government liquor stores and grocery store outlets. Still, it’s hard to see any deal being endangered over the positioning of wine in liquor stores.

Perdue likened these issues to a family dispute and advised Canadians to “relax and breathe easily.”

Soothing words, but with Trump in power, Canadians can never relax on trade issues, even at the urging of a decorous cabinet minister.